Wert Corporation Uses a Predetermined Overhead Rate Based on Direct

question 24

Multiple Choice

Wert Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs.Last year,the company's estimated manufacturing overhead was $1,200,000 and its estimated level of activity was 50,000 direct labor-hours.The company's direct labor wage rate is $12 per hour.Actual manufacturing overhead amounted to $1,240,000,with actual direct labor cost of $650,000.For the year,manufacturing overhead was:

• A)overapplied by $60,000
• B)underapplied by $60,000
• C)overapplied by $40,000
• D)underapplied by $44,000

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Definitions:

Legalistic Nature

Refers to actions or processes that are heavily reliant on formal legal procedures and regulations.

Collective Bargaining Contracts

Legally binding agreements resulting from negotiations between employers and labor unions on terms of employment.

Collective Bargaining Agreement

A legally binding agreement resulting from negotiations between a labor union and an employer that dictates the terms of employment.

Beck Rights

The rights of union members to object to the portion of their union dues used for political activities unrelated to collective bargaining, named after the Supreme Court case Communication Workers of America v. Beck.